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Apple Iphone Analysis
Apple Iphone Analysis
Marketing Management
Apple Inc. Case Study
Table of Content
Introduction 2
Apple SWOT analysis 7
Apple PESTEL Analysis .............
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Marketing Management
Apple Inc. Case Study
Introduction
The phone starts ringing, we're going to pick it up and when we touch it,
the ringer volume smartly goes down! Yes! Today a company like HTC could
make this kind of cellphone.
Since the launch of the IBM Simon in 1993, smartphone technology has
reached levels that until recent times had only been dreamed about.
Features such as wireless sharing, HD video recording and mobile internet
are now commonplace and todays average smartphone has more
processing power than computers used by NASA to land a man on the moon.
All over the world, the smartphone experience is being shared by more and
more people every day. (Belic, 2012)
The convergence of mobile telephony, Internet services, and personal
computing devices is resulting in the emergence of a mobile Internet (Ishii
2004; Funk 2001). The key devices for accessing the mobile Internet
-currently dubbed smartphones - are powerful new computing devices
offering traditional wireless voice service as well as native software
applications and, perhaps most importantly, the ability to connect to and
run a myriad of Internet-based services including email, geo-location,
streaming video, and social networking, while providing a good user
experience. The business opportunities presented by this new category have
attracted many of the major global information and communications
technology (ICT) firms, including firms from the mobile telephony, personal
computer, Internet, and personal digital assistant (PDA) industries, into a
complex new landscape of competition. For many of these firms, capturing a
portion of the total value created by the smartphone industry is believed to
be a key to future growth and profits. (Kenney, 2011)
The interest is understandable. Today more than 1.3 billion mobile phone
handsets are being sold annually, and in 2010 smartphones made up almost
20% of that total (Gartner, 2010; Ahonen, 2010). Sales of smartphones are
increasing almost 100% per year, and total global sales volume is expected
to surpass that of PCs by 2012 (Gartner, 2010). By collapsing the boundaries
between previously distinct devices, smartphones are subsuming sales of
mobile phones entirely and, increasingly, netbook and notebook PCs. To
complicate the landscape, the smartphone is not the only device at stake,
tablets and ebook readers are emerging as key components of the mobile
universe. Across all devices, total mobile revenues - including advertising,
subscriptions, handsets, applications, and so on - are forecast to surpass $1
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Apple Inc. Case Study
trillion by 2014 (Gartner, 2010). Given the rate at which smartphone are
penetrating the market and component prices are declining by 2015 there
will be, at least, 2 billion smart mobile devices in use globally. (Kenney,
2011)
According to the instructions we should make a report with a
organizational business plan structure to depict current situations of Apple
Inc./ iPhone division, and then analyze strength and weakness of the
company. I will start with SWOT and PESTEL analysis. Then we review the
most effective force on iPhone production with Porter's 5 forces. Then we will
analyze Apple iPhone Growth and market share in depth with BCG matrix. I
use mostly 2012 figures to draw an up to date image from Apple iPhone
production and market situation. Ansoff matrix will be the next analysis
which helps us understand iPhone market penetration and how it reached
diversification.
Apple is a big company with several products and services that provide
along with products. Each product has its own market. It is possible to use
multiple factors and combine related statistics for analyzing a company with
different product. But in this case we are required to analyze smartphone
industry only. I use recent figures (2010 to 2013) for analyses. For brands
comparisons I consider Apple, Samsung, HTC, ZTE, and RIM (BlackBerry).
For set goals and making the reports objectives we should specify what
we want.
It is required to indicate strength and weaknesses of smartphone section.
In my opinion weaknesses are more important. They could emerge in any
areas such as production lines, technological aspects or selling process and
cause big failures. Prominent strength and weaknesses will be identified and
then will be matched with political, social, technological and environmental
factors.
Industry intensity will be assessed using Porters 5 forces analysis. This
analysis classifies strong and weak points within 5 forces: Threat of new
entrants and substitute products, bargaining power of suppliers and
customers, and segment rivalry. These forces analyze micro environment.
For macro factors we could look into PESTEL analysis.
For market share and growth analysis Growth-share matrix (BCG matrix)
will be used. This method indicates a product strength using its sales cash
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Apple Inc. Case Study
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Apple Inc. Case Study
market share: Android went from having 48.7% of the market in 2011 to a
whopping 70.1% in Q4 2012. Apple's iOS has also grown slightly, capturing
22% of the market share by the end of the same period. How much is there
left for everyone else? As of Q4 2012, a meager 7.9%.
The success of the iPhone, Pre, and Blackberry shows the strength of
consumer demand for an intelligent, multifunctional device. The appeal of
the smartphone will create significant new revenue streams for carriers and
developers, who should strive to create new service bundles that build off
this mobile platform with converged video, voice, and data applications.
(Cellular-news.com)
This will obviously have a huge impact on the mobile Internet economy,
which is already exploding from the growth of smartphone penetration in the
past few years.
Some other highlights from the report:
Marketing Management
Apple Inc. Case Study
These forecasts are much higher than those of other industry analysts,
who generally expect smartphone unit sales to hit about 1 billion a year by
2015. (Gobry, 2012)
Marketing Management
Apple Inc. Case Study
the future of mobile media and computing devices with iPad. (Investor
Relation: Apple.com)
Apple vision statement:
Apple Background
On December 2012 The Economist reported that Apple became the
most valuable company ever (in nominal terms), beating the record that
Microsoft hit in December 1999. Apples share price peaked at $705 before
entering bear territory and falling by 25%, to $510; at the start of 2012 it
had been $410. (News: The Economist, 2012)
Apple Incorporated is an American corporation that designs and
manufactures computer hardware, software and other consumer electronics.
The company is best known for their Macintosh personal computer line, Mac
OS X, extremely loyal user-base, iTunes media application and the iPod
personal music player. The company headquarters is in Cupertino,
California, CEO and co-founder is Steve Jobs and the company boasts 284
retail locations spanning 10 different countries (Bright Hub, 2010).
Apple Inc. was founded on April 1, 1976 in a garage by Steve Jobs and
Steve Wozniak. The young entrepreneurs brought different strength to their
fledgling company: Jobs had a flair for conceptualizing products, while
Wozniak had the technical know-how to make them happen (Washington
Post Economy, 2012).
Apple I was the first product that Apple Inc. produced. It was a personal
computer (PC) with a MOS 6502 cpu clocked at 1 MHz and 4Kb memory. In
1977, Apple introduced Apple II which became a very successful device.
After that the company began to produce Apple II series. The Apple II was
followed by Apple II plus, Apple IIe, Apple IIc, Apple IIGS, Apple IIc Plus and
Apple IIe Card.
Apple introduced Macintosh in 1984 that became a very successful
computer. It was a first computer featuring a graphical interface and a
mouse for navigation. The new computer sold very well, pushing apple's
fiscal 1984 sales to an unprecedented 1.5$ billion. (Chapman & Haskisson)
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By 1985, however Jobs and Scully began to disagree over the direction
they wanted the company to take. After Jobs' attempt to remove Scully
failed, Jobs left Apple in May to start his own new business, NeXT
Computers. (Chapman & Haskisson)
In December 1996, Apple acquired NeXT, with the plan of using its
technology as the basis for a new operating system. After being gone for
more than a decade, Jobs returned to the company he had originally
cofounded with Wozniak. (Chapman & Haskisson).
In 1998 Apple introduced the new generation of PowerMacs, PowerBooks,
and the highly anticipated iMac and iBook, which were less expensive
computers aimed at the how-end computer market. After an entire year
without showing a profit, the first quarter of 1998 began three years of
profitable quarters for Apple. (Chapman & Haskisson)
Apple ventured into the market of legal downloads with the introduction of
its iTunes Music Store in 2001. iTunes offers downloads at a specified price
without requiring subscription or monthly fees. iTunes offers its users a
selection of more than 6 million songs, with new songs continually added.
(Chapman & Haskisson)
For music lovers, the iPod is the greatest invention since the Walkman.
With up to 160 GB of storage, it allows users to carry up to 40,000 songs or
200 hours of video wherever they go. There are currently four different iPod
styles: the iPod shuffle, iPod classic, iPod nano, and iPod touch (Chapman &
Haskisson). Apple earned 5,615 million just from iPod in 2012 (APPLE INC.,
2012).
Brief Chronology:
1976 With $1,300, Steve Jobs and Steve Wozniak found Apple
Computer, Inc.
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Apple Inc. Case Study
1985 John Scully assumes the helm after a management shakeup that
causes the departure of Jobs and several other Apple executives.
2001 The iPod is released; Apple opens its first retail store in Virginia.
Marketing Management
Apple Inc. Case Study
software as well. The iPhone allows for 8 hours of talk time. Apple sold
1million iPhone less than three month after this product was available to
customers. Apple expects this trend to continue during 2008 and to reach
sales of 10 million iPhones, stealing 1 percent of the mobile phone market
share. (Chapman & Haskisson).
One year following the untimely death of Steve Jobs, the company he cofounded and led for most of his adult life appears to be thriving and lacking
any serious obstacles to its break-neck growth in a rapidly changing
technology market. (Gallagher, 2012)
That said, Apple Inc. still has plenty of challenges ahead. Some of those
stem simply from the nature of the fast-paced, hyper-competitive consumer
technology business the company currently competes in and largely
dominates. (Gallagher, 2012)
Other challenges may be more unique to Apple and its singular focus on a
relatively narrow line of products. And long-term, the company may still feel
the loss of a leader who possessed an uncanny ability to see around corners,
and bend other strong personalities to his will. (Gallagher, 2012)
The guy who could literally pull rabbits out of his hat no longer exists,
said independent technology analyst Roger Kay. (Gallagher, 2012)
Apples had a phenomenally strong year since Jobs death from cancer last
October, which left the company permanently in the hands of the senior
management team he spent years cultivating, led by CEO Tim Cook. Its also
had some stumbles along the way. (Gallagher, 2012)
Some missteps with features such as Siri the infamous personal digital
assistant first embedded into last years iPhone 4S and the Apple Maps
tool in the latest iPhone 5 have caused some level of embarrassment. The
company under Jobs direction was not free of slip-ups either, and some
issues have spanned both periods, such as growing concerns about the
treatment of workers in the massive Chinese factories that produce the
companys popular products. (Gallagher, 2012)
But if proof is in the numbers, investors may find it hard to argue against
the crew running Apple now. The company is conservatively projected to
report a 44% revenue gain for its just-ended fiscal year with earnings
expected to post a gain of more than 60% from the previous year.
(Gallagher, 2012)
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Apples stock is up more than 70% from the day Jobs passed away,
despite the stated concerns at the time of many investors and analysts
about how well the company could keep its pace of innovation without its
chief visionary at the helm. (Gallagher, 2012)
The key challenge for Apples management team will be in keeping the
companys strongest profit engines humming. And this will involve the right
mix of technological innovation and deal making. (Gallagher, 2012)
The iPhone is the most crucial element. First launched in 2007, the
smartphone accounted for nearly 55% of Apples total revenue in the first
nine months of the just-ended fiscal year. While the company does not
disclosed profitability data on its product lines, analysts believe the iPhone is
the major driver of operating profits, with a gross margin of well over 50%
on the devices. (Gallagher, 2012)
Apple can command those high subsidies because of the strong consumer
demand for the iPhone. But competitors are pushing hard into the
smartphone space. Samsung has already outpaced Apple in global
shipments thanks to its use of Googles Android operating system and its
wide line of phones that appeal to a broader array of markets and
consumers. (Gallagher, 2012)
Apples old nemesis Microsoft is launching an updated Windows Phone
platform this fall, with Nokia and Samsung building devices for the software.
(Gallagher, 2012)
Investors will continue to watch closely for signs that Apples current team
can not only push forward its existing product line, but add to them with new
categories and innovations. Though the iPhone 5 launched a year following
his death, a report by Bloomberg BusinessWeek cited unnamed sources as
saying that the device received detailed input from Jobs prior to his death.
(Gallagher, 2012)
Despite Apples strong run of success, its narrow product line and strong
reliance on the iPhone makes it vulnerable to competitors who may come up
with better ideas. (Gallagher, 2012)
Apples future success will likely hinge on its ability to maintain that
posture no matter whos in charge. (Gallagher, 2012)
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Strengths
Weaknesses
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Economic
factors
Social
factors
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relatively greater risk of being targeted because of its high
profile and the amount of PII managed. (APPLE INC., 2012)
Technologic
al factors
Environme
ntal factors
Legal
Factors
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Apple Inc. Case Study
Bargaining
power of
suppliers
Threat of new
entrants
Bargaining
power of
customers
Competit
ive
rivalry
Threat of
substitutes
Six years to the month after Steve Jobs unveiled the first iPhone, the
smartphone industrys go-go years are officially over. Cautious comments
from Samsung Electronics on Friday underlined the message conveyed by
the latest quarterly results from Apple earlier in the week: even as it scales
new heights, the smartphone market is entering a phase in which vaulting
growth rates and high profit margins will be much harder to come by.
(Waters, 2013)
The developing world, is riding a wave of cut-price devices, many of them
closer in nature to feature phones than the high-end smartphones that have
put Apple and Samsung at the top. (Waters, 2013)
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Bargaining power of
suppliers:
a disassembled iPhone
reveals that the
microprocessor chip is
supplied by samsung;
Philips and ...many other
companies provide chips
that are central to the
camera, display, and
motion sensor.
maintaining good
supplier relationships is a
balanced that apple will
have to find in order to
stay ahead of its
competitor. *
competiti
ve rivalry
in
Smartpho
ne
industry
Bargaining power of
customers:
as I said before, iPhone
counts as a luxury
device. it is expensive
in comparison other
smartphones. retailers
often reports customer
dissatisfaction about
iPhone and other Apple
product price.
Threat of substitutes:
in this conpect we do not look for
other brands similar products. In
fact we should find totally different
product s for this section of analysis.
with the all capabilities that a
smartphone could have , there most
be another revolution or kind of
invention for substitute product.
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Apple Inc. Case Study
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Apple Inc. Case Study
According to this chart Apple iPhone share market is 15% of the overall
market for 3rd quarter, 2012. And it takes second place after Samsung with
31.3% share market. Black Berry (Research in motion), ZTE, HTC are 4.3%,
4.2% and 4% respectively. For developing the BCG matrix we need relative
market share. It means we should compute one brand's share to its largest
competitor: (Wikipedia)
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Apple Inc. Case Study
Brands
Market share
Samsung
Apple
RIM
ZTE
HTC
31.35%
15%
4.3%
4.2%
4%
Largest
competitor
31.35%
31.35%
31.35%
31.35%
31.35%
1:1
1:2
1:8
1:8
1:9
Relative market
share( approximat
ely)
For market growth rate current sales figures are used in comparison the
same last year.
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Marketing Management
Apple Inc. Case Study
For Market growth rate I used the table above and derive the table below:
Smartphone brands
2012
sales*
2011sales
Apple
Samsung
Research in motion
148.4
177.4
41.4
93.1
95.2
52.8
Market growth
rate
%59
%86
-%21.5
39.2
26.7
44.6
14.9
-%12.1
%79.19
(Blackberry)
HTC
ZTE
* In millions
Market
growth
100.0%
Stars
HT
C
Apple
iPhone
Question
marks
80.0%
60.0%
Samsu
ng
40.0%
20.0%
ZTE
35.0
30.0
25.0
20.0
15.0
10.0
5.0
0.0%
0.0
-20.0%
RIM
Cash cows
-40.0%
Market Share
Dogs
Marketing Management
Apple Inc. Case Study
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Marketing Management
Apple Inc. Case Study
Existing Markets
New Markets
Existing products
New products
Market
Penetration
Product
development
Market
Development
Diversification
Marketing Management
Apple Inc. Case Study
Inc. Form 10-K which helps us to understand iPhone's furious growth over 5
years and its revenue making role.
2012
change
2011
change
2010
$80,47
7
71%
$47,05
7
87%
$25,179
$156,50
8
66%
$65,225
45%
$108,24
9
43.47
%
51.4%
38.6%
Net sales by
operating segment
2012
change
2011
change
2010
$
57,512
36,323
10,571
33,274
50%
56%
31%
94%
47%
$
38,315
27,778
5,437
22,592
49%
37%
174%
$
24,498
18,692
3,981
8,256
18,828
33%
14,127
44%
9,798
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Apple Inc. Case Study
Product
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Marketing Management
Apple Inc. Case Study
Price
Promotio
n
Place
Marketing Management
Apple Inc. Case Study
Physical
layout
Provision
of
customer
service
Marketing Management
Apple Inc. Case Study
Conclusion
In this report, I used marketing tools for analyzing Apple iPhone's market
position and growth situation. We all know Apple is a big company with
worldwide reputation. People willing to line up for new products and mostly
they are satisfied with results. Nevertheless Apple has problems too.
Technology is a very competitive market. And day by day companies do
more R&D to make products better than others.
We reviewed Apple strength and weaknesses, all the good things like
brand loyalty, unique technology especially in iPhone, matchless interface
and applications, strategic agreements with big companies like AT&T and
Weaknesses like expensiveness, retailers controlling problems, vigorous
competitor like Samsung and RIM. Apple is on top from so many points now,
no doubt. But with PESTEL summary that I discussed earlier we know there
is no certainty in these days market. Brands devour fame and income and
willing to do their best.
I reviewed Apple form 10-K deeply. Apple financial statements say
everything is ok and growth is more than satisfactory. But in risks section
many items were mentioned to remind investor it is a very hard business.
Both Ansoff and BCG matrix are fine for iPhone, Samsung running so fast
but Apple still dominates US and aside recession points, figures show Apple
knows the business.
Recommendations
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Marketing Management
Apple Inc. Case Study
Regarding all the analysis is made; there are some suggestions and
strategies for Apple which can be useful in educationally scale.
Marketing Management
Apple Inc. Case Study
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Marketing Management
Apple Inc. Case Study
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